DEEP EXPERTISE
A manufacturer of umbilical cords that reach to the seafloor opens a plant as the offshore sector perks up
THE offshore energy sector is expected to begin to rebound next year, but to feed the recovery, the sector needs its own version of umbilical cords — massive cables stuffed full of pipes and fiber optics to connect the deep-water wells and surface platforms.
That’s why Umbilicals International, the Houston subsidiary of the United Kingdom’s Seanamic Group — recently opened an umbilical manufacturing and loading facility along the Houston Ship Channel in Channelview.
“Umbilicals is a word that makes most people say, ‘Really?’ But it brings the life, energy and fluids to a well,” Umbilicals International CEO Bob Conners said. “I hate to say it, but it’s sort of the extension cord of the industry.”
Umbilicals run about 8 inches in diameter and tens of miles long, housing all of the necessary cables for electrical wiring, hydraulic power, chemical injection fluids and fiber optic connections.
The lines within each umbilical are carefully and tightly twisted in a helix shape to maintain their flexibility and strength without ever kinking like a garden hose.
The cables typically are wrapped in flexible steel piping to withstand the pressures of deep water and then covered in silicone.
The new factory opened
earlier this month, but it likely won’t operate at full capacity until March.
Offshore drilling has recovered far more slowly than lowercost onshore operations, particularly at U.S. shale fields, such as West Texas’ booming Permian Basin. James West, an energy analyst at the research firm Evercore ISI, said the offshore energy sector has suffered because of low oil prices and the competition from shale, but rising global energy demand and oil prices are paving the way for new offshore development.
“We’re looking at an offshore market that’s finally starting to inflect higher,” West said. “We’ve been bouncing along the bottom for a few quarters.”
The recovery, however, is likely to progress slowly, analysts said. Profit margins are tight, and companies have become very conservative and methodical with their offshore spending.
But, once decisions are made, they want to act as cheaply and quickly as they can, Conners said. His company can manufacture the cables and parts at its existing Stafford plant and piece the larger umbilicals together at the new Channelview plant, which has easy port access to the Houston Ship Channel. That allows the company to load products directly onto marine vessels for delivery around the world.
Umbilicals International was acquired by in Seanamic in early 2015. Seanamic employs about 150, with just under half working in Houston. The new umbilicals plant will eventually add about 20 more workers, Conners said.
Most of the new business in the next few years will be in offshore expansions, Conners said, with some new projects moving forward in the Gulf of Mexico, many on the Mexico side of the Gulf. More growth in offshore development also is expected in Africa, the Middle East, and in emerging markets such as Indonesia and Malaysia.
“Everyone is expecting to see some normalcy. We’re all sick of going into boardrooms and saying the downturn has gotten longer,” Conners said. “Well, we’re not in a downturn anymore.”